Government Signals Incentives To Encourage Carbon Exchange Trading

JAKARTA - The government has revealed that it provides a number of incentives to encourage the awareness of companies and issuers to participate in the Indonesian carbon exchange (IDX Carbon).

Minister of Environment and Head of the Environmental Control Agency (BPLH) Hanif Faisol Nurofiq said that his party would provide various incentives for companies that are active in the field of renewable energy and reduce their carbon.

"The main thing is fiscal incentives, tax holidays, tax allowances, the government provides tax breaks for companies that invest in environmentally friendly technology and are related to renewable energy," said Hanif in an evaluation of international carbon trading, Monday, January 20.

In addition to fiscal incentives, the government through banks and the government provides a green financing scheme with low interest rates for environmental projects such as renewable energy.

Then, the government also provides funds from the Environmental Fund Management Agency (BPDLH) for innovation projects, ecosystem rehabilitation, pollution control, and other environmental actions. The government also provides green business loans for business actors, including MSMEs.

Meanwhile, in terms of non-fiscal incentives, the government provides a green label procurement for companies that use it to increase prices and develop markets. In addition, the government is committed to simplifying licensing for these companies.

Furthermore, the government also provides a cooperation program with corporations through the environmental Corporate Social Responsibility (CSR) project.

"Then the next one is the carbon trade, which we are launching together today, and hopefully this will once again become our node for mutual interaction so that the business world will spur environmental awareness," he said.

Meanwhile, IDX President Director Iman Rachman said his party also offered various incentives for companies participating as carbon unit buyers at IDX Carbon.

"As carbon buyers, we provide administrative financing exemptions for service users, there is an exemption from the cost of recording carbon units, and there is no membership fee and annual fee for participants. We also provide IDX net zero incubators, to help companies calculate gas rates," he said.

To note, the Government and the Indonesia Stock Exchange (IDX) officially launched the first International Carbon Trade in Indonesia through the Indonesian Carbon Exchange (IDXCarbon). Where at the beginning of its first trade, the volume of trade transactions was recorded at 41.822 CO2 or tCO2e.

Meanwhile, of the total transactions recorded, there are five projects, nine service users, and nine buyers in International Carbon Trade. The Authorized Indonesian Tech Based Solution or IDTBSA price is IDR 96,000, and the Authorized Indonesian Tech Based Solution Renewable Energy or IDTBSA-RE is IDR 144,000.

It is known that the five initial projects traded in the carbon exchange are the first, the minihidro water power plant Gunung Wugul which can reduce 5,000 tons of equivalent CO2. Second, the operation of a new power plant powered by natural gas in Priok Block IV amounting to 763,653 tons of CO2 equivalent.

Third, the single cycle plant is the combined cycle at the new natural gas-fueled power plant Grati Blok II with the potential for emission reduction of 495,000 tons of equivalent CO2. Fourth, Block II of the generating unit in Muara Tawar which has the potential to reduce emissions of 30,000 tons of equivalent CO2.

Fifth, new natural gas-fueled power plants Block III PJB Muara Karang which is able to reduce emissions of 750,000 tons of equivalent CO2.